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Olmert named as key suspect in real estate graft scandal

Former Israeli prime minister Ehud Olmert was named as a key suspect in a real estate scandal in which he is accused of having accepted a bribe. The information was released by Israeli media on Thursday after the lifting of a gag order.

AFP - Former prime minister Ehud Olmert was named as a key suspect in a massive real estate scandal in Jerusalem after a court on Thursday lifted a gag order on the case, Israeli media reported.

The reports said Olmert, who is also an ex-mayor of Jerusalem, was suspected of having taken a bribe of 3.5 million shekels (almost one million dollars at the current exchange rate).

Police declined to comment and the court would only confirm the lifting of the gag order.

Olmert returned from a European trip on Wednesday night shortly after his successor as Jerusalem mayor, Uri Lupolianski, was arrested for his alleged involvement in the scandal over Jerusalem's Holyland residential complex.

Israelis riveted by the affair had awaited the court's decision on whether to lift the ban on naming the main suspect, in the latest in a list of graft cases to face Olmert.

Police last week also arrested a former Olmert associate, Uri Messer, and several other men suspected of bribing officials to smooth the way for the construction of the grandiose Holyland complex.

Israel's "real estate scandal of the century" has been splashed on the front pages, with papers running Olmert's photograph while pointing to the gag order which had prevented the naming of a "leading public figure" allegedly involved.

Olmert spokesman Amir Dan said the former premier denied any involvement in the affair although he was ready to answer police questions.

Police have a state witness to testify against Olmert and the former premier is expected to be questioned in the next few days, according to the media reports.

The website of the Haaretz daily said police suspect Olmert received the bribes through two channels -- his close friend Messer, a lawyer, and through another aide, Shula Zaken.

Messer is himself a witness in a separate graft trial currently under way against Olmert.

"The net is tightening" was the headline in Israel's Maariv newspaper on Thursday above an old photo showing Olmert and Lupolianski together at a construction site.

After the appearance of Wild West-style posters of Olmert marked "Wanted" in Israeli cities over the past week, police said they had arrested two suspects in Tel Aviv on Thursday.

Newspapers and readers, meanwhile, have had a field day lambasting the controversial hilltop complex of high-rise buildings that make up Holyland, describing it as a monstrosity, an eyesore and a blot on Jerusalem's landscape.

In December, Olmert, 64, pleaded not guilty to charges of corruption linked to three other cases. He had resigned under pressure in September 2008 after police recommended he be indicted.

He is accused of unlawfully accepting gifts of cash-stuffed envelopes from Jewish-American businessman Morris Talanski and of multiple-billing for foreign trips.

Olmert has also been charged with cronyism in relation to an investment centre which he oversaw when he was trade and industry minister between 2003 and 2006.

That case is expected to drag on for several months, if not years. If found guilty, Olmert could face jail time, although it is unclear how long.

Attorney General Menachem Mazuz dropped three other corruption probes against Olmert, who was named by Time Magazine as Israel's most able politician when he took over as premier from the ailing Ariel Sharon in May 2006.

All the charges relate to a period before Olmert became premier, to his terms as mayor of Jerusalem and later as trade and industry minister.